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July 25, 2018

Know the ABC's of VOW and IDX: Some Questions and Answers

Know the ABC's of VOW and IDX: Some Questions and Answers

Virtual Office Websites (VOW) and Internet Data Exchange (IDX) are two fundamental concepts you should understand as a real estate professional. Here are some questions and answers that cover the basics:

Q: Why should brokers be allowed to opt out of participation for VOWs selectively?

A: IDX allows brokers to opt out, VOW does not if the Department of Justice (DOJ) has their way.

IDX allows for limited data fields, VOW feeds must allow all the MLS data and not selected fields, or at least more fields, if DOJ has their way.

So if you opt out of IDX and I can't put your listings on my site, you can still create a VOW and put all the listings (including mine) on your site.

Your site has all the listings. I can't afford a VOW so my IDX site has only some of the listings because you opted out of IDX. Your site has more content than mine. I am at a competitive disadvantage because you have my listings to display and I don't have yours to display. To level the playing field, I should have the right to opt out of VOW participation selectively and participate in VOW with other brokers who share their listing data.

What if a particular broker has no ethics and misuses the data. You should have the right as a listing broker not to deal with that broker professionally. Should you not have the right to make that type of business determination?

Opting In or Out, all in or selectively, has its place. If the reason a broker opts out is to force a competitor out of business, then DOJ should go after that broker, but to say all brokers will misuse an opt-out when sellers and the government have recourse for misuse is inappropriate.

Q: In the traditional world I can invite a consumer to my office to look at all the listings in the market area via my access to the MLS. I'm not obliged to reveal the listing agent's name or contact information to represent them on the buy side of the transaction. Why isn't this the same on the Internet once I have established a relationship? The point being, in my office I have the right to provide all the local listings to them. The listing broker cannot opt-out to allow my particular company from having this right if they have opted to post their listing on the MLS.

A: The Internet is not the conventional or traditional world. Your ability to benefit from the promotional value of my listing is limited in a traditional world. People must physically make it to your office and this really does limit your ability to use my listing data for marketing benefit.

The Internet is a much different place than the traditional world and allows for leverage never contemplated when brokers, as competitors, agreed to cooperate and share listing inventory when MLSs were created. I should have the right to limit your ability to use my data and hard-earned listings to your marketing advantage at my expense.

A more straightforward answer, the Internet is not the traditional world. It is not the same. Anybody who thinks so doesn't understand the power of the Internet. It is a charade to hint otherwise.

Q: I would also question the statement, "As stated, listings generate leads for the listing broker." Do not all REALTORS® have the right to generate leads from those listings once the listing is on the MLS and cooperationis now offered?

A: No. That makes no sense at all. You can show my listing to your client, but you cannot use it to generate leads, that was not and is not the reason I cooperate with you, my competitor. It never was the intention of MLS and never will be.

Q: Whereas I would agree with your sentiment that some have used the consumer's interest in this debate to bolster their argument, the consumer's thoughts, opinions and concerns on this issue should not be ignored. As an industry, we would ignore consumer interests at our peril. In 2005, to argue that the Internet is still just an advertising medium as Blanche of Realty Times insists is to misunderstand what the consumer thinks on that issue. We talk to 300-400 consumers a day on behalf of our REALTOR® members and I can tell you that they believe that the agent's website they are visiting should be doing exactly what a visit to an agent's office would be able to do, and more. It is why they are using the Internet. They do not want to go to the office. That was yesterday.

A: The consumer does not always get what the consumer wants, nor should they. I am a consumer of computers and I think IBM should give laptops to my staff for free. That is an obvious, unrealistic want and it's easy to understand how IBM would be under no obligation to give me (the consumer) what I want.

While it is a little more subtle in the areas we are discussing, this is still the case. The consumer does not always get what they want. Consumers want all brokers to provide full service including fiduciary responsibilities and not charge more than $500 to list and sell a home. They can want all they want. But If consumers want advanced technology available at websites, then let brokers offer it and they will prosper. Those who do not offer robust websites will perish. Let the market take care of itself.

But this strays from the listing question. If I take the listing, pay for pictures and virtual tours, advertise in newspapers, put up signs, etc. all on a contingency of payment (commission), I should have the right to decide if I want my competitors to use my capital to their advantage.

If I want to do this, it's my choice, but if I don't want to, that should be fine as well and if consumers don't like it, they can list somewhere else. It is a free country, or at least it should be.

Q: In an MLS, are we not cooperating to bring buyers to the seller?

You have the listing and I have my source of clients. I will show them what listings I want to, and if you and I have been cooperating with each other and you are offering a reasonable split on the transaction, I will bring the buyer and my work will be equal to your work by potentially attracting the buyer. You win and I win, that's real cooperation.

A: No, I am going to work to sell the listing myself, or have an agent from my office or branch office sell it. You are an agent of last resort. I have selling clients as well and I want more selling clients. My listings allow me to attract selling clients. I am in the selling client business as well as the listing business. Also, everyone knows I work much harder than you so I will end up doing a lot of your work. Cooperation does not mean compensation, we need to make sure we are clear about that. As a member of the MLS, I agree to making you an offer of compensation.

Q: You and I have often had a coffee together and visited each other's open house walk-throughs and my understanding was that you wanted me to bring my buyers to the table. Why do you now want to make it so difficult for me to do that? If what you are saying is that you are only doing all of this so that you can have me do all the work with the buyer, but in the end, they ditch me and call you, well, I don't know if I find that very cooperative.

A: Don't mistake my good nature for charity. This is a fiercely competitive business. I can be competitive and drink coffee at the same time. Also, don't mistake cooperation with friendly. I can be cooperative in the transaction and not be friendly.

Q: If I take the listing, pay for pictures and virtual tours, advertise in newspapers, put up signs, etc, all on a contingency of payment (commission), should I have the right to decide if I want my competitors to use my capital to their advantage?

A: Yes you should.

Final Note: Real estate compensation is contingency based. Brokers and Agents work for free most of the time.

Brokers only get paid if the listing sells. If it does not sell, they have invested not only time but cash. When brokers list, they work on a contingency. Most other occupations that work on contingencies charge a lot more than 6%. Attorneys charge 30% to 50% when they work on a contingency fee arrangement.